Prime Minister Tony Abbott has held his first formal meeting as Prime Minister with his Japanese counterpart Shinzo Abe, during a gathering of world leaders at the East Asia Summit in Brunei.

During their meeting, the pair discussed progress towards a free-trade agreement, and Mr Abe accepted Mr Abbott's invitation to visit Australia and address a special sitting of parliament.

"As far as I'm concerned, Japan is Australia's best friend in Asia and we want to keep it a very strong friendship," Mr Abbott told Mr Abe, before the talks were closed to the media.

Mr Abbott has said he will focus on trade relations in talks with world leaders in Brunei.

He met Wednesday with the South Korean president, Park Geun-hye and with China's Premier Li Keqiang, who congratulated him on his election win.

"As far as I'm concerned, Japan is Australia's best friend in Asia and we want to keep it a very strong friendship.

Tony Abbott

At the Asia Pacific Economic Cooperation (APEC) summit in Bali earlier this week, Mr Abbott said he was confident of securing a free-trade agreement with China within 12 months, and that he was using the meeting to shore up free trade with other countries in the region.

He met with China's president Xi Jinping and confirmed he will travel to China in the first half of next year.

"It would be wonderful if a trip towards the end of the first half of next year was consummated by an agreement here," he said.

"Our intention is to move as quickly as we can. I would be disappointed if we couldn't conclude a significant free-trade agreement with China in 12 months."

Mr Abbott also sought to give reassurances to both Australians and overseas investors that Australia welcomes foreign investment, saying that he particularly wants Australia to get its "fair share" of Chinese investment.

"Australia must always be open for business," he said.

"We welcome foreign investment. It will be good for jobs. It will be good for economic activity. It should be good for Government revenue."

The official session of the East Asia Summit will take place on Thursday.

PNG leader says Abbott wants to 'increase engagement'

Earlier, Mr Abbott met with Papua New Guinea's prime minister Peter O'Neill on the sidelines of the APEC gathering.

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Mr O'Neill says the meeting, during which Mr Abbott signalled that there would be no changes to Australia's aid program to PNG, confirmed the "complete harmony" of the bilateral relationship.

"In fact they want to increase their engagement with Papua New Guinea because they feel that as a growing economy in the region it is important that we work together building the necessary infrastructure to sustain that growth," he said.

Mr O'Neill says Mr Abbott reaffirmed the agreement PNG struck with the Rudd government to send 50 Australia Federal Police officers to PNG to held rebuild the country's police force.

He also said the agreement to send asylum seekers to Manus Island would remain.

US to push China over South China Sea

US secretary of state John Kerry will use the meeting to push Southeast Asian leaders and China to discuss the South China Sea dispute, a senior US official said on Wednesday, despite Beijing's reluctance to address the issue at such meetings.

Mr Kerry arrived in Brunei on Wednesday and is also expected to hold talks with Mr Li.

President Barack Obama last week cancelled his scheduled trip to the summit because of the US government shutdown, raising concern that Washington would lose some of its influence in countering China's assertive claims over the South China Sea and in maintaining its strategic "rebalancing" toward Asia.

"That rebalance is a commitment, it is there to stay and will continue into the future," Mr Kerry told Association of Southeast Asian Nations (ASEAN) leaders in opening remarks shortly after arriving, saying the crisis in Washington was nothing more than "a moment in politics".

China has resisted discussing the territorial issue with the 10-member ASEAN, preferring to settle disputes in the South China Sea through one-to-one negotiations with individual claimants.

I'm sure the Chinese don't mind that I'm not there right now.

Barack Obama

"The Chinese consistently indicate their view that 'difficult issues' that might fall outside the comfort zone of any member need not be discussed," the US official said.

"That is not a view that is held by the US, or, I believe, many if not most of the EAS member states, but we will find out."

The conflicting claims over the South China Sea pit an increasingly assertive Beijing against smaller Asian nations that look to support from the United States.

The row is one of the region's biggest flashpoints amid China's military build-up and the US strategic "pivot" back to Asia signalled by the Obama administration in 2011.

China claims almost the entire oil- and gas-rich South China Sea, overlapping with claims from Taiwan, Malaysia, Brunei, the Philippines and Vietnam.

The United States says it is officially neutral but has put pressure on China and other claimants to end the dispute through talks.

Kerry would emphasise the role of the United States as "a longstanding champion of security and stability in the region, and as an advocate of the rule of law, peaceful solution of disputes, and freedom of navigation, and the principle of unimpeded lawful commerce", the senior official said.

Nevertheless, Washington will be hamstrung at the summit because of Mr Obama's absence.

"I'm sure the Chinese don't mind that I'm not there right now," the US president said at a news conference in Washington on Tuesday.

"There are areas where we have differences and they can present their point of view and not get as much push back as if I were there."